All Forum Posts by: Tom C

Tiara,

Don't over think your numbers.
Rent = $850/month
Expenses = $425/month (includes taxes and insurance)
NOI = $425/month
Debt service = $166 (just the P&I payment)
Cash flow = $259

Those taxes are horrible. By time you get done screwing with all the numbers this house will be gone. If it's in good shape get it under contract. Its a great deal.

When you work in the remodeling business, you often have to go inside folks homes. As a young adult, I was shocked at the amount and type of people who have little rooms setup in their basements with an ventilation fan and that's where they go and get away from the kids at night to smoke a joint. Then when I became a cop, it seemed like everyone we encountered smoked. We couldn't possibly arrest everyone who had a quarter bag and a bowl on them.
Pot is everywhere. Many of our neighbors, friends, business leaders and even educators smoke it while cowering in their basements.They are forced to buy it from shady people who are always in fear of being arrested or ripped off. Because it's illegal everything about it has become very profitable and dangerous. Just like with any other mind altering substance, it can be abused, but many very normal, successful contributing members of society use it on a regular basis without issues.

Like Ron Paul says, decriminalize it, grow it and lets tax it!

It's not just short sales. Like I said, Fannie did a 90 day to me when I bought it off the MLS sitting as a REO.

As far as I know, they have to send back all offers to FM. I've made some pretty low ball offers and always have gotten a counter offer.

Yes.. Like the others said, when she's busted, you will also get cuffed. Your house will be turned upside down by the cops looking for cash, drugs, weapons and documentation. Your computers and all software will be seized and you will make the local news.

Tell her to leave politely and explain why. Until she's out the door, do not let her conduct business in your house. My question is, how did you verify her income before you ever rented the place out to her and do you have to share a bathroom with her? Ewww!

I think I mentioned before, contact your Sec 8 office and have them put your home in their system. A tenant will see your house is for rent and contact you. If they want it, then they will tell their case worker and give them the agreement, signed by both of you. Then Sec 8 will setup a time to come out and conduct the inspection, once you pass, they will tell you how much they are willing to pay per month and what the max you can charge them. Yeah, it's pretty backassward.

My best "paying" tenant was my Sec 8 tenant. They paid $400 and he was responsible for the other $200.

Originally posted by Tim Wieneke:

Tom/Sam,
I'm trying to give you ideas for terms that aren't in conflict with the Fair Housing Act is all. Whether or not there are latent racial implications in terminology, using terms that are ambiguous (especially in a public forum that is referenced by mass media reporters on a fairly regular basis now) keep one in a better legal situation. I've had contact with two news reporters through this site now. It is being read by folks who may or may not be liking investors.

Tim

I understand what you are saying, but the term "gentrification" does not apply here. These areas have been in this condition for the 40 years. It's not something that has happened over night and when one poor person moves out another moves in. Sometimes a little better off or sometimes even lower income. There is no upward or downward movement there and I also don't believe classifying an area by racial make up is politically incorrect either. It’s actually very important as an investor to know your market and customers.

Tim,

I understand what you are saying, but the reason I specifically stated "white" was because, in my little city, there are different segments of the hood. Such as we have Mixed races, low to no income, Black, no to low income (Whites would not be welcome) and then White, no to low income (Blacks would not be welcome). The area I am talking about, a Black person would not want to live there nor would it be safe for them to live there. A White person would be accepted faster in the all Black neighborhood, then a Black person would be accepted in the all White neighborhood. It's just the dynamitic and mentality of our area.

Also the types of crimes committed are much different in each of these segments. None of these area's do I currently invest in, but I have spent a lot of time in all of them as a cop.

"gentrification" Not on your life. These folks are some of the lowest class people your going to meet. They make cash by stealing cars and chopping them up in their garage or back yard. They work the underground economy any way they can to get their beer, smoke and RentaCenter money.

I don't have a problem with investing in the hood either, but you have to remember that the people who are going to rent your units there are mostly not the greatest people to deal with either. You will have lots of drama and have to understand how to stay out of it. Also as Mike said, there is a big difference between a low to no income neighborhood and a war zone, although I have to add, what one person see's as a war zone, another person who has worked or lived in that environment, may find it OK. Much of it is a matter of perception.

I use 2 rules when I am hunting for a deal. First is, will I feel comfortable letting my wife and young daughter work in this house without me and second, when it's vacant will I have to worry about someone breaking in and stealing all the wiring out it. I have been looking at an area of really cheap rentals, the area is bad, but do-able, but then I turn around and think about the house being vacant over night and how much it's going to cost me to replace the breaker box, wiring and damaged door and it just comes down to it's not worth the risk.

This is a white, low to no income neighborhood, where the tenants sit on the front porch all day and drink beer and smoke pot. I would feel comfortable in this neighborhood and get along well with them, because I grew up around these type of people. But these same people will turn around and steal from you just as fast as you turn your back and I wouldn't feel good with letting my wife help rehab a house down there.